He said visitors to the Powerhouse Museum had fallen nearly 20 per cent in two years.

“Commercial revenue is not increasing to meet the shortfall in the level of funding," he said in a report tabled in State Parliament yesterday.

“Only the Sydney Opera House has consistently managed to grow its commercial revenue [since 2007]."

The report is based on the financial results for a series of community and education agencies across NSW.

The report highlights a rise in government funding for arts and culture hot spots including the Sydney Opera House, Powerhouse Museum, Australia Museum, Art Gallery of NSW and State Library. The institutions will receive $272 million in 2011-12, a 25 per cent increase on 2010-11.

However, there has been a collective 33 per cent rise in spending on asset-related activities over the past five years that has left a maintenance backlog of $22.6 million for the Art Gallery of NSW and $8.9 million for the State Library.

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The government’s latest budget also mandates an annual 1.5 per cent efficiency dividend from each agency.

“Management need to continually identify . . . new ways of increasing income to meet operational needs and business objectives," the report says.

After an upgrade that left it able to hold fewer exhibitions, the Powerhouse Museum is relying on a little magic from its Harry Potter exhibition, which opened last month, to revive flagging visitor numbers. In 2010-11, visitors to the museum were 8.3 per cent below target, although increased attendance at the Sydney Observatory helped ensure a $3.3 million surplus for umbrella agency the Museum of Applied Arts and Sciences Trust.

The Australia Museum also experienced a 13.1 per cent decline in visitors in 2010-11.

“The decline in visitor numbers also impacted revenue from admission fees, which decreased 20.5 per cent when compared to the previous year," the report says.

In relation to the state Education Department, the Auditor-General noted that Year-12 retention rates had improved from 2006 to 2010, but were 5 per cent below the national average at 68 per cent.

He also highlighted the ageing education workforce. Twenty per cent of public-school teachers are younger than 35 and 10 per cent are younger than 30. In 1986, more than half of teachers were younger than 35.